Can I Claim My 18-Year Old as a Dependent if They Work?
When lenders conduct financial background checks on the finances of mortgage applicants, they check several elements. Lenders take a look at income and expenses. Then, they examine the applicant’s financial responsibilities. Bills remain the most obvious expense. Family obligations factor into the picture too. Children under the age of 18 and spouses remain obvious dependents. In 2022, other family members count as dependents too.
Here we explore situations when 18-year-olds work and live at home.
The Australian Taxation Office defines a dependent child as one under the age of 18. However, more 18 years olds are living at home. In Australia, children move out of their parents’ homes at age 23 to 24. Several stay at home while they attend college. It helps them save on food and housing expenses. Therefore, college students living at home remain dependent on their parents.
In the case of 18-year-olds who live at home and work, the ATO considers them dependents. Although they have reached adult status, they qualify as dependent for two reasons. Living at home means that the parents provide lodging. Therefore, they still live with their parents and their parents provide shelter.
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Young Adult Dependent Status Conclusion
Figuring out the dependent status of your children in an 18-year old who works matters for tax and home loan purposes. In terms of taxes, it reduces your taxable income. For mortgage purposes, it reduces your borrowing power. However, homeowners can help their children purchase a home and increase their borrowing power. Mortgage House loan specialists can explore family pledge home loans with you. Contact our team today.